Adoption and integration of new technology, differentiation and adding staff are top priorities for RIA growth, according to a new Schwab study.

“It’s clear that the environment RIAs operate in, from the next generation of clients and advisors to new technologies is changing,” says Bernie Clark, executive vice president and head of Schwab Advisor Services.

“Independents will gain about 7% in market share by 2018,” Clark notes. “The question advisors face is how they accelerate that pace, increase their share of the affluent market and lay the groundwork for their firms well into the future.”


Technology, according to a survey of over 600 RIAs in Schwab’s latest Independent Advisor Outlook Study, is helping advisors deliver a better client experience, creating efficiencies that are making firms more profitable and allowing advisors to spend more time with their clients.

Nearly half of advisory firms surveyed said they would most likely use automated investment management platforms to target younger, next generation investors or investors with under $100,000 in investable assets.

Serving clients with lower minimums and reducing the cost to serve certain clients were seen as the primary benefits of using an automated investment management platform.


Differentiating firm services may be a major opportunity for advisors, the study found.

While more than three-quarters of surveyed firms said they offer holistic wealth management, there were a wide range of definitions for the term.

Most firms defined holistic wealth management as including investment management (97%), tax-efficient planning (77%) and long-term financial planning (76%).

Other services, such as financial planning for children, estate planning, charitable planning, and health care planning, may, the study found, be a differentiating opportunity for advisors to offer value-added services.


Adding staff in operational and support roles is the top talent acquisition priority for firms of all sizes, the study found. For larger firms with more than $500 million is AUM, this is followed by bringing on junior advisors (23%), while smaller firms are focusing more on hiring individual tenured advisors (17%).

Business development and investment management are the most difficult positions to fill, the report found.

More than half of advisors surveyed are considering creating a more diverse workforce including age, gender and race as a priority.

About one-quarter report they have already taken action to hire diverse employees, and close to half of advisors (44%) are expanding their networks to identify diverse candidates.

Recruiting in colleges and universities is “incredibly important” to help boost  talent and diversity at RIA firms, Clark says, citing Schwab’s experience with its Executive Leadership Program, launched last year.


Nearly one-third of firms surveyed offer equity ownership opportunities to their staff and nearly half have a documented path to ownership, one that typically results in equity owners buying in.

Employees with an equity share are more likely to grow with the firm, RIAs offering equity said.

Equity ownership opportunities are increasingly more likely as a firm’s AUM grows -- firms with more than $100 million are two and half times as likely as those under $100 million to offer equity ownership.

Larger firms currently offer equity ownership more often than smaller firms (52% vs. 21%), but 37 percent of smaller firms report that they are looking into offering equity ownership in the future.

“Expanding equity opportunities are very encouraging,” Clark says. “It’s a great way for firms to grow, ensure long-term success and retain top talent.”

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